Car Salesman Confidential: How To Buy A Used Car

 It's All About Who You Can Trust
By Mark McDonald | August 01, 2014

In recent years, with the transaction price of the average new car climbing past $30,000, and the sluggish economy, more and more people are electing to keep their cars a little longer, or buy used. So the question is, how do you keep from getting stuck with a bad used car? Here are my suggestions, as a ten year veteran of car sales:

1. Establish a Relationship With a Salesperson

Any time you buy from a person you've never met, whether he's a salesman for a dealership or some guy on eBay, it's a bit of a gamble. The seller may be a straight shooter, and the car he's selling may be perfectly fine. Or he may be a con artist and the car may have serious problems with it. In my opinion, a good strategy is to find a salesperson you trust -- maybe the man or woman you bought your last new car from -- and work through them. When it comes time to buy something used, call them up and tell them what you're looking for. If he's smart, your salesman will steer you to a car you'll be happy with, if for no other reason than he wants to sell you more cars in the future.

2. Buy From a Large Dealership With a Good Reputation

I'm not knocking small "Mom & Pop" dealerships, because I have many friends who work at places like this and there's nothing wrong with the cars they sell. But I think you have a slightly better chance of finding a good used car at a large, well-established dealership. There are two reasons. First, large dealerships have service departments, whereas your local "dirt lot" probably does not. Chances are good that any car you find at a large dealership has at least gone through a basic Safety Inspection to make sure the tires are good, the brakes work, and nothing is wrong with the steering. Most dealerships will also check the fluids and change the oil. With a small lot you just have to take the seller's word for it that the car is mechanically sound, or arrange to have your own mechanic inspect it. Second, a big dealership has a bigger reputation to protect. They know that if they abuse you, you'll go on line and write a bad review or complain to their corporate office, and nobody wants that. So they go to greater lengths to make sure their used cars are sound, and they'll be more responsive to your complaints after the sale. Let me give you a quick example. A used car manager at a large dealership I know went to an auction and bought five used BMWs for a song. On the outside, these cars looked fine -- but every single one of them had frame damage. I'm not sure how this guy expected to get away with it, but his plan was to sell these cars without disclosing the damage and make a killing. But when their history was discovered this guy was fired – instantly -- and the cars never even made it onto the dealer's lot. A large organization just cannot afford to do business like that. A Cautionary Word About CarFax. CarFax is great . . . but don't put all your faith in it. CarFax only reports what's reported to it. If two people have an accident, but choose not to report it, it won't show up on the CarFax. Second, just because CarFax says the car has been in an accident, it doesn't mean it's a "bad vehicle" or you shouldn't buy it. Read the fine print. Was the vehicle unable to move on its own power, and had to be towed away? Or was it able to be driven away? The fact is, the collision might have been a minor incident with only minimal damage, but because the Police were called and a report was taken, it shows up on CarFax as an "accident." Third, even if a vehicle is involved in a collison, if the damage has been repaired properly there's no reason to avoid buying the car. See if records are available, and ask how it was repaired and by whom.

A Word About Rental Cars.

Many times, dealerships will supplement their used car inventory with vehicles from rental car companies. The reason is simple: they need the inventory. A dealership can't just sit around and wait for customers to trade in what's popular, so they go out and buy desirable vehicles from rental companies, or at auction. A lot of people are put off by this, but they shouldn't be. If a car is in good condition it shouldn't matter who the previous owner was. (In fact, you may even have a better chance that the vehicle was properly maintained because most rental companies perform regular maintenance.) Rentals will typically have a little higher mileage on them than comparable privately owned cars, but that also means they're priced lower. I have sold many a used car that came from a rental fleet and had no complaints yet.

3. Buy a Certified Used Car

If you've been out cruising dealerships lately you may have noticed some of the cars have stickers on them saying things like "Certified" or "Certified Pre-Owned." What this means is that the car has gone through an inspection process, been serviced and, if necessary, repaired, and is being sold with an extended warranty. For example, if you come across a Certified Honda, it means that the regular 5 years or 60,000 mile drivetrain warranty has been extended to 7 years, 100,000 miles. This is a tremendous value. A certified car has a warranty on it that, in some ways, is better than the original factory warranty. Certification offers every used car buyer extra "peace of mind" that they haven't bought a lemon, and knowledge that the manufacturer stands behind it. Of course, a certified car will also cost a little more than a car that isn't certified, but in my opinion it's worth it. A Word About "As Is" Vehicles. Most of the used cars found on dealership lots have a sticker called the "Buyer's Guide" or "As Is" that tells you whether or not the car has any warranty left on it. Pay attention to this sticker. If it says "As Is," it means As Is -- you're buying the car just as it sits, with no warranty. There's an old saying in the car biz that, if you buy an "As Is" vehicle and you drive it off the lot and it breaks into two pieces, you own both pieces. The dealership is under no obligation whatsoever to fix that vehicle for you. Here's the thing. If you discover a problem with an "As Is" vehicle before you complete the paperwork or drive it off the lot, most dealerships will probably fix it for you -- depending on what it is. If it's a minor cosmetic issue, like a broken cupholder or soiled carpet, probably not. But if it's something major, like a bad headlight or mechanical issue, they probably will. Just be sure to get any promises in writing on the "We Owe" (that's the document the dealer uses to remind us of what we owe the customer). Verbal representations in the middle of a sale tend to get forgotten, or can be distorted by memory, so always get it in writing.